Madigan's son's employer rakes in suburbs' insurance business

The son of Illinois House Speaker Michael Madigan is forging a successful insurance career in the Chicago suburbs with the help of mayors who look to his powerful father to advance their political and legislative agendas.

Andrew Madigan, 26, joined the powerhouse Chicago firm Mesirow Financial in 2008 after interning with the company during college. Since 2010, he has worked in business development for the company's insurance division, where he is now a vice president.

His job: connecting with decision-makers, laying the groundwork for new business and then handing over the details to teams of Mesirow insurance brokers who seal the deals.

His emergence into a political world long dominated by his father raises new questions about the intersection of the speaker's public and private interests.

In the last two years, Mesirow has won new government business tied to Andrew Madigan in more than a half-dozen suburbs, according to public records and Tribune interviews. In at least three towns where Mesirow won business — Chicago Heights, McCook and Bridgeview — the speaker did favors for the mayors around the same time the suburbs hired the firm.

Chicago Heights Mayor David Gonzalez benefited from Madigan's political machine in the closing days of his election. McCook Mayor Jeffrey Tobolski, also a Cook County commissioner, got Madigan's assurance that a legislative effort targeting dual officeholders was going nowhere. And Bridgeview Mayor Steven Landek was appointed to an open seat in the state Senate with Madigan's help.

All three mayors say their connections to the speaker had nothing to do with their decision to hire Mesirow.

Company officials declined to specify the public or private contracts Madigan has helped win nor would they put any dollar figure on his value to the company.

"He's a hardworking kid, and he's done a terrific job for us," said Norm J. Malter, president of the insurance services division at Mesirow. "In business, people hire those who can go out and build relationships. Andrew is one of those people."

Mayors said they have bumped into the younger Madigan at political events attended by local leaders — including at the annual 13th Ward appreciation dinner thrown by his father, the ward boss. Andrew Madigan handed out his business card at last year's event attended by some 300 political supporters, officials and community leaders.

Although Andrew Madigan's success has been good for Mesirow, it has raised the ire of some local brokers who have lost business in his wake.

One longtime broker in Chicago Heights accused Gonzalez of giving Mesirow business as "payback" for Michael Madigan's help in the city election. The mayor said it was a false allegation from a bitter man.

The lack of transparency in Illinois makes it difficult for the taxpayers to know whether favoritism exists and how it might affect the cost of their government, said Rey Lopez-Calderon, executive director of the Illinois office of the government watchdog group Common Cause.

"If he is using his father's political influence to get business, obviously that is fundamentally unethical," Lopez-Calderon said. "People can feel they are being strong-armed or intimidated, and it could end up with business flowing to a small group of family and friends.

"But to us it is a broader issue. These things should be traceable. … Andrew Madigan should be called upon to disclose where he seeks business and which entities are changing contracts. Anyone who hands a business card to our political leaders should be subject to lobbyist laws, but in this state our laws are so weak that none of that is required."

Speaker Madigan's spokesman, Steve Brown, said any attempt to connect Andrew Madigan's business to the work of his father was "kind of a stretch."

Asked about whether it is appropriate for Andrew Madigan to be soliciting business at his father's political events, Brown said he had no knowledge it ever happened.

Brown referenced a Tribune series detailing how the speaker makes public decisions that affect the bottom line for clients of his private property tax law firm. Michael Madigan described those reports as "garbage."

"I talked to the speaker ... and he said to me, 'It looks like the garbage haulers are on a new route, and now they're trying to dirty up my family,'" Brown said. "So that's really about all I would have to say about any of this."

Andrew Madigan declined to be interviewed.

The municipal insurance business is a highly competitive industry long steeped in political connections and personal relationships.

Insurance has been a starting point for the sons of Chicago politicians before. Cook County Commissioner John Daley, one of Richard J. Daley's sons and brother of former Mayor Richard M. Daley, began his career in insurance and still works in the field.

Andrew Madigan's political lineage speaks for itself.

His father controls the flow of billions of dollars in state funding for schools, roads and suburban infrastructure and presides over suburban wish lists for everything from refurbished Metra stations to park projects. And as head of the state's Democratic Party, he holds enormous sway over suburban politics, including the flow of campaign cash in races for local state representatives who work closely with suburban leaders.

Those same leaders have more leeway to dole out brokerage work to friends or political supporters because it is considered a professional service, typically not covered by strict bidding rules. At the same time, governments frequently shop around for better deals for taxpayers, who cover the cost of insuring everything from garbage trucks to public employee health care.

Mesirow's political and civic involvement runs deep, and the firm touts itself as one of the largest public sector insurance practices in the Midwest.

"It's not surprising that some of the opportunities he develops would be in an area where we are a market leader," Mesirow said in a statement responding to questions about Andrew Madigan.

Mesirow has won new government business tied to Andrew Madigan in Berwyn, Burbank, Chicago Heights, Cicero, Lyons, McCook and South Holland, according to public records and Tribune interviews.

Suburban leaders who responded to Tribune inquiries — including Burbank Mayor Harry Klein, Cicero Town President Larry Dominick and South Holland Mayor Don De Graff — said they felt no political pressure because of Andrew Madigan's involvement.

In a July 1, 2011, letter to Andrew Madigan, McCook Mayor Tobolski asked if Mesirow would be interested in being the town's liability insurance broker.

"I trust that you will be direct with the village regarding our insurance options and potential cost savings and would like you to assist the village," the letter said.

The village hired Mesirow in December 2011. Around that same time, a controversy began in DuPage County about whether mayors should be allowed to simultaneously hold a second elected position on county boards. Legislation began percolating in Springfield over the issue early this year.

"Yes, I have spoken to the speaker about that issue," Tobolski said. "Mike called me toward the end of the session to tell me that he did not think that legislation would be going anywhere. I thanked him for his help and for the call."

Tobolski said he has never discussed Andrew Madigan or village insurance matters with the speaker.

"I understand how it may seem, but I can assure you that one thing had nothing to do with the other," Tobolski said. "I am not sure what profession that young man could enter where he bumps into politicians that wouldn't raise these issues."

Tobolski also said he hasn't always gotten his way with the Legislature Madigan controls. He said he has for years been unsuccessfully seeking money from the Legislature to repaint McCook's water tower.

"Of course I wouldn't want to say anything that might upset the speaker, but I see the issue," Tobolski said. "I think there might be a problem if there was something flowing back the other way, but in our case there isn't. I don't know how it is done in other cities, but as far as McCook is concerned, you would have to look at how the brokers were chosen. We went out for bids, and they were the best bidder."

Mesirow is the recommended bidder to also become an insurance broker for the McCook exposition center. A vote on that issue had yet to be scheduled.

Tobolski said he doesn't recall writing the letter to Andrew Madigan. He said he deals with a different Mesirow official who was introduced to him by Landek, the Bridgeview mayor.

Landek owes his job in the state Senate in large part to Michael Madigan, who presided over the Democratic committeemen meeting on Feb. 5, 2011, when Landek was unanimously selected to replace Sen. Lou Viverito, who retired.

In a brief interview with the Tribune, Landek said he did not know whether Andrew Madigan was involved when Bridgeview hired Mesirow on Dec. 30, 2010, for a three-year contract worth up to $70,000 per year as the village's broker on risk management insurance. The Tribune could not determine through documents provided by the village whether Madigan was involved there, and both Landek and Mesirow declined to say.

Landek said all insurance brokerage deals in Bridgeview go through a competitive bidding process.

"If Andrew Madigan was on the team that won the business, he was also on the Mesirow team that lost the health insurance bid," said Landek, referring to the bids for city employee health insurance that went to another brokerage firm last year. "What does that tell you?"

Michael Madigan also threw his political support to Mayor Gonzalez in Chicago Heights. The suburb's April 2011 election was one of only two mayoral races that year where Madigan paid for campaign workers, according to state campaign reports.

Though Madigan made a $1,500 donation to the mayor's political fund, the more significant contribution was the help of three Madigan campaign workers. They included Martin Quinn, a top Madigan lieutenant who is now the 13th Ward alderman representing the speaker's Southwest Side stronghold. Madigan reported paying the workers more than $12,000 to help Gonzalez.

The mayor played down Madigan's role in the election, which he won 57 percent to 42 percent.

"These people did not come out and run our campaign," Gonzalez said. "They came out at the end with a couple bodies here and there and said let's organize maybe Election Day."

Gonzalez said he knew he wanted to hire Mesirow even before he took office because he'd learned of the firm's good reputation while he was working as an accountant assisting local governments.

"I have never, ever spoken to Speaker Madigan more than a minute in my life," Gonzalez said. "I would be surprised — if you ask him who the mayor of Chicago Heights is — if he knows my name."

Gonzalez said he first met Andrew Madigan more than a year before the election, at a fundraiser for Tobolski. They ran into each other again this May at a mayors gathering, Gonzalez said.

Chicago Heights would not provide records about the city's dealings with Mesirow. The mayor said he has never spoken with Andrew Madigan about insurance business and instead hired Mesirow because of another rainmaker, senior managing partner Mike Mackey, whom he has known for years.

Gonzalez's relationship with Mesirow also helped the firm get business with the local school board at Bloom Township High School District 206. The mayor said he recommended Mesirow take over the district's insurance work and then called Mesirow to give them the heads-up. The school board, with a majority of members aligned with Gonzalez's Unity Party, voted July 9 to make the switch.

Records from District 206 show Andrew Madigan was among the Mesirow team copied on the company's thank you letter to district administrators.

The longtime Chicago Heights insurance broker who lost out when Mesirow got the city's business says his firm was ousted so Gonzalez could pay a political debt.

Gene Farina, of Farina Insurance, told the Tribune in a recent interview that shortly after the election, he was visited by longtime friend and Chicago Heights administrator Frank Perez. He broke the news that Gonzalez was giving Mesirow the job of helping the city secure health insurance for employees.

"Perez told me that Gonzalez said it was payback time because Madigan was so helpful in the election," said Farina, whose son now runs the family business.

Perez acknowledged telling Farina his firm was out but said it was Farina who brought up the speaker's name.

"I had no idea what he was talking about," said Perez, a Gonzalez supporter who now is superintendent of the Chicago Heights Park District. "I think Gene is just angry and bitter because he lost the business."

Farina acknowledges he is both angry and bitter. "You bet I am, but that doesn't mean I am making things up. You can't make up a conversation like that."

Gonzalez said Farina used his own political connections to get the insurance business in Chicago Heights, as did brokers before him.

"I can make decisions for the city, what's best for the city," Gonzalez said. "And if it ruffles the ones that were there because of their political connections and the good ole boys, then so be it."